Govt warned on media deal

Officials warned the Government against making a deal with MediaWorks which allowed the struggling company to defer a $43 million payment for its radio licences, it was reported last night.

Communications Minister Steven Joyce has denied the deal amounted to a taxpayer-funded loan and says MediaWorks, which owns TV3 and a network of radio stations, is up to date with its payments.

TV One reported last night it had documents which showed the Ministry of Economic Development told the Government it did not see a strong case for the deal, while the Treasury said it would effectively see the Government acting as a bank and taking on additional risk.

The report said Mr Joyce initially turned MediaWorks down but its former head, Brent Impey, subsequently talked to Prime Minister John Key and the arrangement was eventually approved by the Cabinet.